Key Points
- Musely secured $360 million without giving up any ownership stake
- General Catalyst's Customer Value Fund takes a share of revenue instead of equity
- Company has been cash flow positive since pivoting to prescription skincare in 2019
Musely, an American telemedicine company specialising in prescription skincare and hormone treatments, has secured over $360 million from General Catalyst‘s Customer Value Fund without giving up any ownership stake in the company.
The deal represents an alternative to traditional venture capital. Instead of selling equity or taking on interest-bearing debt, Musely will repay the funds through a fixed, capped percentage of the revenue it generates from using the capital. This structure, known as non-dilutive financing, allows founders to raise large sums while retaining full ownership of their companies.
Jack Jia, co-founder and CEO, Musely, told online startup news platform TechCrunch that he was not actively seeking capital when General Catalyst’s fund approached him last year. The company, he said, has been cash flow positive for years and had no pressing need for outside investment.
Why Musely rejected traditional venture capital
Jia said he had consistently turned down approaches from venture capital firms because he did not want to reduce his ownership by selling a portion of the company. Traditional VC deals require founders to give up equity in exchange for funding, diluting their stake with each round.
General Catalyst’s Customer Value Fund operates differently. It does not take an equity stake and does not charge interest. Instead, it lends capital to companies with predictable revenue streams and recovers its investment through a share of the revenue those funds help generate. The percentage is fixed and capped, meaning the total repayment amount has a ceiling regardless of how well the company performs.
The funding will support sales, marketing and customer acquisition efforts, according to the company. Musely joins a portfolio that includes Grammarly, Lemonade and Ro. The fund operates with its own distinct limited partners and was not part of General Catalyst’s most recent $8 billion fundraise.
Musely was founded in 2014 as a wellness community platform. It pivoted to prescription skincare in 2019 and has since expanded into treatments for hair loss and menopause care.
The company operates as a direct-to-consumer telemedicine service, connecting patients with board-certified dermatologists and obstetricians through asynchronous consultations — meaning patients submit information and receive prescriptions without real-time video calls.
A decade of capital efficiency
The company raised $20 million from DCM and other investors at its founding. According to Jia, it has not raised a single dollar of equity capital in the decade since. This makes the current $360 million deal notable not only for its size but for its structure: Musely has now secured one of the largest non-dilutive financing rounds in the direct-to-consumer healthcare sector while maintaining the same ownership structure it had a decade ago.
Non-dilutive financing has gained traction among profitable startups seeking growth capital without the ownership trade-offs that come with traditional venture funding. Revenue-based financing, as this model is sometimes called, aligns investor returns with company performance while protecting founders from the dilution that typically accompanies large fundraises.
General Catalyst launched its Customer Value Fund to target precisely this category of company: profitable businesses with predictable revenue that need capital for growth but have no structural need for equity investors. The fund’s portfolio reflects this focus, comprising established consumer technology and healthcare companies rather than early-stage startups burning cash.
Your Questions, Answered
What is non-dilutive capital?
Non-dilutive capital is funding that does not require a company to give up ownership. Unlike traditional venture capital, where investors receive equity, non-dilutive financing is repaid through other means such as revenue share or fixed payments.
How does General Catalyst's Customer Value Fund work?
The fund lends capital to companies with predictable revenue streams. Instead of taking equity or charging interest, it recovers its investment through a fixed, capped percentage of the revenue generated from using the funds.
What does Musely do?
Musely is a direct-to-consumer telemedicine platform offering prescription treatments for skin conditions, hair loss and menopause care through asynchronous consultations with board-certified doctors.
Has Musely raised venture capital before?
Musely raised $20 million from DCM and other investors when it was founded in 2014. According to its CEO, the company has not raised any equity capital since then.
